Cash bonanza for Berkeley shareholders

Shareholders in housebuilder Berkeley are set for a cash bonanza. They are to receive £1.4bn in cash over the next six years - with the first £600m instalment coming right away.

Berkeley, which operates exclusively into the top end of the market, is overflowing with cash as a result of a fundamental switch in business strategy.

It proposes to transform itself into a large-scale urban regeneration player. The result is that it will return a total of £12 a share to its lucky shareholders.

Latest financial results published by Berkeley this morning (Friday) show a mouth-watering pre-tax profit of £230m on a turnover of £1.4bn. Operating margins ran to 17.6%.

Sustaining them could be a challenge. Roger Lewis, chairman, said: "Build costs remain under pressure and this has intensified in the last six months with the continuing shortage of labour. Sale price inflation may no longer cover increased costs, putting pressure on operating margins."

Looking forward, Berkeley's targets for the current financial year are to achieve 43% of units with selling prices over £300,000 and 13% over £500,000.